The facts about millennials buying real estate will debunk any negative perception you may have about this generation. Most people think millennials are broke and will never be able to afford to buy real estate. This is far from the truth, and there are statistics to prove it.
Facts About Millennials Buying Real Estate
Did you know:
- They are the 2nd largest group of home buyers in the country, right after generation “X”.
- And they are not only buying in “affordable” places. They are purchasing homes in expensive areas such as San Diego, Seattle, and Boston!
Source: Business Insider
Furthermore, most of the millennials I have helped buying a place were not only shopping with the sales price in mind. They were purchasing based on the maximum monthly payment they were willing to make. Smart!
Buying a Home Based On Monthly Payments
Chances are you qualify for a more considerable sales price than you would feel comfortable. Do the math. Say you qualify for a $600,000 loan with 20% down. That puts you at a $480,000 loan amount. At a 4.75% interest rate, your monthly payment equals $2,504 (let’s keep it simple and not add property taxes and insurance). Feel comfortable?
No? Then work it backward, and ask your lender to calculate a sales price based on a number of your choosing, not based on your income.
Then, shop for a home and negotiate a sales price while always calculating and re-calculating your monthly payment based on the price you and the seller compromise.
Did you know all terms, not just the sales price, in a real estate contract are negotiable?
All Contract Terms In a Transaction Are Negotiable
I would say that 8 out of 10 buyers I work with are surprised to know that all terms in a contract are negotiable. In other words, all parties can compromise on who pays for what. Yes. There are “usual” fees that a seller or buyer “usually” pay for, but they are not set in stone. Cha-Ching!